The Pushpay Holdings Ltd (ASX: PPH) share price has soared another 15% today on the back of the company's impressive FY20 results released yesterday. Pushpay reported a 32% jump in revenues on strong organic growth.
Who is Pushpay?
Pushpay provides a cloud-based online payment solution that helps organisations like schools, churches, and education providers to centralise donation data and manage payment operations. The software allows users to maintain a database of gift entries and donor information. Donors can also send recurring gifts.
What did Pushpay report?
Pushpay reported a US$31.4 million increase in total revenue for the year ended 31 March 2020 with revenue reaching US$129.8 million. Revenue growth is expected to continue as the business achieves increased efficiencies and gains further market share in the US faith sector.
Total processing volume grew by US$1.4 billion to US$5 billion, a 39% increase. Continued growth in total processing volume is expected. This will be driven by a large proportion of new medium and large customers, higher adoption and usage of Pushpay's product, and increased adoption of digital giving.
Gross margin increased by 5 percentage points over the year to 65% and is expected to continue to improve in FY21. Nonetheless, net profit after tax (NPAT) declined 15% or US$2.8 million over the year. NPAT of US$16 million was recorded for FY20, down from US$18.8 million in FY19. FY19, however, included a one-time benefit from unrecognised tax losses and research and development expenditure of US$20.9 million.
Church Community Builder acquisition
Pushpay completed the acquisition of Church Community Builder for US$87.5 million in December 2019. Church Community Builder is a church management system that provides a platform for churches to connect and communicate with community members. The platform can record member service history, track online giving, and perform a range of administrative functions.
The acquisition complements Pushpay's giving solution, with a joint product offering launched in April 2020. This is a significant milestone on Pushpay's goal of delivering a fully integrated church management system, community app, and giving solution to customers in the US faith sector.
Outlook
Further strong revenue growth is expected as market share is gained in the medium-term. The company is continuing to evaluate potential strategic acquisitions that broaden the current proposition and add value to the business. Over the longer term, Pushpay is targeting over 50% of the medium and large church segments, an opportunity which represents over $1 billion in annual revenue.
